Effect of Danish Boycott Patchy
After the controversial cartoons portraying pictures of the Muslims' prophet, Muhammad (peace be upon him), were issued in a Danish newspaper, Muslims started boycotting Danish products. This affected different parts of the economy, and the interesting part is that, even though the "Effect of Danish Boycott Patchy" article is all about politics, Hamel's frameworks and Porter's forces arise again as part of the strategic decisions that were made and that we could see.
First of all, with the collective boycott for Danish products, we can tell how powerful buyers can be if they work together and agree on one thing. In this case, the boycott forced sales of Danish products to drop, even though they have been very profitable and were doing well. We could also sense the power of buyers in that supermarkets, when they knew about the boycott, pulled down the Danish products from the shelves, leaving these shelves empty for a while so that buyers can notice that this particular store does not sell Danish products. It was like these supermarkets were fearful of the buyers' power that they didn’t want to give them the impression that "we see what you boycott". They probably did not want that kind of risk of losing the customers.
Second, the article tells us that supermarkets and hypermarkets pulled down Danish products leaving the "shelves empty for the people to notice". Now I would think of this as one of Hamel's customer interface component of the business concept. I think it fits properly under "fulfillment and support". These supermarkets are reaching the customers by providing them with support. In this case, it is not necessarily a physical support with the products, but rather an emotional support. This is important because it keeps the customers loyal. In addition, I think that leaving the shelves empty for the customers to see falls also under "information and insight". They are providing customers with the necessary information: "Hey! We are with you! We do not sell things you do not like and you can see that from the empty shelves!" In fact, I liked that strategy. Furthermore, one manager said, "as the situation stand, [Danish products] are off for the foreseeable future", and that was followed by "positive feedback from [the] customers". Now that is information and insight again. This manager is on the lookout for customer feedback in order for him to be able to extract insight from this information… exactly what Hamel explained in his business concept innovation! I also see information and insight when SADAFCO was trying to tell its customers (and shareholders) that they "do not import or sell any products from Denmark or Norway". They were trying to convey the message to the customers that their wishes are the demands of the companies in the market. We can tell here how important a role the media plays in the daily decisions of managers. It's their channel of getting information over to the customers. That is something I never noticed before.
Third, "relationship dynamics" comes into play in this particular article when we are told about the customer who came back with the Danish product and asked for a refund. This person's wishes were respected and he was given his money back. Now I think that this is a kind of interaction between the buyer and the seller. It creates a sense of loyalty among the customers to that particular store.
Fourth, with regards to Hamel's strategic resources, I suppose we can say that core processes (which is what the people in a firm do) appear all over the article! First of all, we see how companies responded. The actions they took in order to satisfy the customers for example included removing the Danish products from the supermarkets. It is true that in this example I gave the supermarkets did not physically transform inputs into outputs, but hey! They did create value for the customers through their actions. Those actions were valuable to Muslims probably because this is their religion and the cartoons might have been offensive to them!
However, I would like to point out that even though strategic assets (which are part of the strategic resources) are thought to enhance a business concept, I think they worked against the firms and the supermarkets in this article. Strategic assets are what firms own, and in this case, the supermarkets owned the unwanted Danish products and brands that were part of their inventory and, thus, part of their assets. It caused them trouble rather than added value and growth. However, core competencies helped the companies know what to do. Because they were aware of what was going on in the market, they were able to respond, and their response, I think, was suitable to the situation.
Tags: danish boycott|
First of all, with the collective boycott for Danish products, we can tell how powerful buyers can be if they work together and agree on one thing. In this case, the boycott forced sales of Danish products to drop, even though they have been very profitable and were doing well. We could also sense the power of buyers in that supermarkets, when they knew about the boycott, pulled down the Danish products from the shelves, leaving these shelves empty for a while so that buyers can notice that this particular store does not sell Danish products. It was like these supermarkets were fearful of the buyers' power that they didn’t want to give them the impression that "we see what you boycott". They probably did not want that kind of risk of losing the customers.
Second, the article tells us that supermarkets and hypermarkets pulled down Danish products leaving the "shelves empty for the people to notice". Now I would think of this as one of Hamel's customer interface component of the business concept. I think it fits properly under "fulfillment and support". These supermarkets are reaching the customers by providing them with support. In this case, it is not necessarily a physical support with the products, but rather an emotional support. This is important because it keeps the customers loyal. In addition, I think that leaving the shelves empty for the customers to see falls also under "information and insight". They are providing customers with the necessary information: "Hey! We are with you! We do not sell things you do not like and you can see that from the empty shelves!" In fact, I liked that strategy. Furthermore, one manager said, "as the situation stand, [Danish products] are off for the foreseeable future", and that was followed by "positive feedback from [the] customers". Now that is information and insight again. This manager is on the lookout for customer feedback in order for him to be able to extract insight from this information… exactly what Hamel explained in his business concept innovation! I also see information and insight when SADAFCO was trying to tell its customers (and shareholders) that they "do not import or sell any products from Denmark or Norway". They were trying to convey the message to the customers that their wishes are the demands of the companies in the market. We can tell here how important a role the media plays in the daily decisions of managers. It's their channel of getting information over to the customers. That is something I never noticed before.
Third, "relationship dynamics" comes into play in this particular article when we are told about the customer who came back with the Danish product and asked for a refund. This person's wishes were respected and he was given his money back. Now I think that this is a kind of interaction between the buyer and the seller. It creates a sense of loyalty among the customers to that particular store.
Fourth, with regards to Hamel's strategic resources, I suppose we can say that core processes (which is what the people in a firm do) appear all over the article! First of all, we see how companies responded. The actions they took in order to satisfy the customers for example included removing the Danish products from the supermarkets. It is true that in this example I gave the supermarkets did not physically transform inputs into outputs, but hey! They did create value for the customers through their actions. Those actions were valuable to Muslims probably because this is their religion and the cartoons might have been offensive to them!
However, I would like to point out that even though strategic assets (which are part of the strategic resources) are thought to enhance a business concept, I think they worked against the firms and the supermarkets in this article. Strategic assets are what firms own, and in this case, the supermarkets owned the unwanted Danish products and brands that were part of their inventory and, thus, part of their assets. It caused them trouble rather than added value and growth. However, core competencies helped the companies know what to do. Because they were aware of what was going on in the market, they were able to respond, and their response, I think, was suitable to the situation.
Tags: danish boycott|
posted by Lina Osman @ 3:02 PM
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